The Government Accountability Office (GAO) has raised concerns regarding the Social Security Administration’s (SSA) efforts to modernize its fraud prevention technologies, indicating that gaps in these systems could leave synthetic identity scams undetected by financial institutions and federal authorities. Launched in June 2020, the SSA’s Electronic Consent-Based Social Security Number Verification service aims to mitigate the risk of synthetic identity fraud, where criminals blend real and fictitious information to create false identities. However, the GAO’s report reveals that the SSA has fallen short in meeting both agency guidelines for IT investment planning and federal best practices.
The GAO’s findings suggest that the SSA has not adequately established performance measures or goals to assess the effectiveness of its verification service. Stakeholders from the financial industry have expressed concerns about the service, reporting that the verification results are often “difficult to interpret.” Since its enrollment opened in fiscal year 2022, the service has seen limited user adoption, raising doubts about its financial viability and utility in combatting synthetic identity fraud.
Synthetic identity scams have become an increasingly pressing threat in the U.S. The SSA reported nearly 3,000 suspicious activity reports tied to approximately $182 million in potential fraud in 2021 alone. Despite the agency’s investment of an estimated $62 million in developing and deploying the verification service, it has only recovered $25 million through user fees. This disparity highlights the urgent need for the SSA to reevaluate its approach to combating this form of fraud.
In light of these findings, the GAO has urged the SSA to implement appropriate controls over its IT investments and devise new strategies to increase the adoption of its verification service. The report emphasizes the importance of establishing clear performance metrics to ensure the service effectively addresses synthetic identity fraud. The SSA has acknowledged all seven recommendations provided by the GAO, indicating a commitment to improving its fraud prevention efforts and addressing the challenges outlined in the report.
